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The fundamental reason for the extreme leverage today in China’s banks, enterprises and the state itself is found in the decentralized fiscal arrangements of highly self-reliant local governments. This problem has been compounded by the excessive stimulus lending over the past decade. As a result Beijing has promoted the creation of an extensive shadow banking system designed to protect the stability of the major state banks. Stepping back this has led to the state’s growing leverage. This presentation focuses on the impact of the shadow banking system on the state’s finances and compares the costs of China’s response to the global financial crisis with the US response.



 

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Carl Walter joins the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) as visiting scholar with the China Program for the 2021-2022 academic year. Prior to coming to APARC, he served as independent, non-executive Director at the China Construction Bank. He was also previously a visiting scholar with APARC during the winter and spring terms of the 2012–13 academic year after a career in banking spent largely in China. 

His research interests focus on China's financial system and its impact on financial and political organizations. During his time at Shorenstein APARC Walter will continue his book project on how fiscal reforms in China have impacted the banking system, the overall economy and the prospect for financial reform going forward. Walter has contributed articles to publications including Caijing, the Wall Street Journal and the China Quarterly. He is also the co-author of Red Capitalism: The Fragile Financial Foundations of China's Extraordinary Rise (2012) and Privatizing China: Inside China's Stock Markets (2005).

Walter lived and worked in Beijing from 1991 to 2011, first as an investment banker involved in the earliest SOE restructurings and overseas public listings, then as chief operation officer of China's first joint venture investment bank, China International Capital Corporation. Over the last ten years he was JPMorgan's China chief operating officer as well as chief executive officer of its China banking subsidiary.

Walter holds a PhD in political science from Stanford University, a certificate of advanced study from Peking University and a BA in Russian Studies from Princeton University.

 


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This event is part of the 2022 Winter webinar series, The Future of China's Economy, sponsored by the APARC China Program.

 

Via Zoom Webinar. Register at: https://bit.ly/3rC581k

Carl Walter Visiting Scholar, Shorenstein Asia-Pacific Research Center, Stanford University
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Gi-Wook Shin
Haley Gordon
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In South Korea, many have recently expressed anger at the depiction of a woman in hanbok as representing one of China’s 56 ethnic minorities during the opening ceremony for the 2022 Beijing Winter Olympics. Korean politicians and activists also criticized the act, stating that China intended to introduce Korean culture as part of its own.[1] This controversy is the latest amid mounting cultural conflict between the two nations, over the origins not only of hanbok but also of kimchi, and even historical claims to the ancient kingdom of Goguryeo.

These tensions have already brought tangible results. In March 2021, South Korean historical drama Joseon Exorcist was canceled after two episodes due to a widespread boycott among Koreans for its use of Chinese-style props, which was said to distort Korean history. The following month, protests over the proposed construction of a “Chinatown” in Gangwon province resulted in the project’s cancellation. Now, as our latest study shows, anti-Chinese sentiment in Korea has the potential to further extend to the political and national security arenas.

The results [of our January 2022 survey of over 1,000 South Koreans] suggest that anti-Chinese sentiment increasingly has the potential to spill over into the Republic of Korea’s policy and politics.

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Korean views of China have become so negative that as of 2021, according to a survey by SisaIN, they have sunk lower than views of Japan, likely for the first time since Korea and China normalized relations in 1992. Ahead of the Beijing Olympics (January 2022), we conducted a survey[2] of over 1,000 South Koreans and, similarly, found that their feelings towards China averaged just 26.5 on a scale of 0 (very negative) to 100 (very positive), compared to 30.7 for Japan and 69.1 for the United States. Moreover, 42% of our respondents supported Korea engaging in a diplomatic boycott of the Olympic Games, in line with many Koreans’ complaints that Seoul is too soft on Beijing. These results suggest that anti-Chinese sentiment increasingly has the potential to spill over into the Republic of Korea’s policy and politics.

Korea Is Not Alone

Koreans are not alone in their feelings towards China. Indeed, this trend comes amid a rising tide of anti-Chinese sentiment worldwide. A 2021 survey conducted by Pew Research Center found that unfavorable views of China had reached near historic highs in 17 advanced economies, including Japan (88%), Australia (78%), and the United States (76%), as well as Korea (77%). Our survey also found that 84% of Koreans viewed China unfavorably, demonstrating an increasing prevalence of anti-Chinese sentiments in Korea.

As in many societies, Koreans are very critical of China’s political system and its handling of COVID-19: according to Pew (2021), 92% of Koreans thought that the Chinese government does not respect the personal freedoms of its people, and 71% disapproved of China’s COVID-19 response.[3] In line with the Pew study’s findings, our survey found that 84% of Koreans believe that the Chinese government does not respect its peoples’ personal freedoms, and of respondents who reported negative feelings towards China, 66% cited the pandemic outbreak as a contributing factor.

Still, Korea Differs

Yet, Koreans also express negativity towards China over unique issues that are not shared with other peer countries. Foremost among these is Korea’s air pollution: namely, fine dust and yellow dust, which many believe comes from China. Also cause for negativity are China’s coercive actions towards Korea, such as economic retaliation for the deployment of the THAAD missile defense system.[4]

Anti-Chinese sentiment is a critique of Chinese cultural imperialism and illiberalism: few Koreans view China’s institutions as exemplary or say that their country should learn from China.

In particular, Korea is distinctive from its peers for two notable reasons. The first is Koreans’ reaction to China’s perceived cultural imperialism. Over half (55%) of our respondents who had an unfavorable view of China selected cultural conflicts between the two countries (China’s claims to kimchi and hanbok, for example) as well as China’s perceived lack of respect for Korea (62%) as contributing to their negative feelings. Historical issues also loom large for Koreans: 52% of respondents with negative sentiments say they disapprove of China due to disputes between the two countries over history (such as the Northeast Project, which claims that the ancient kingdom of Goguryeo is part of China).

The second factor that makes anti-Chinese sentiment in Korea unique is its demographic underpinnings: namely, the outspokenness of younger generations. Out of 14 countries polled by Pew in 2020, Korea was the only country in which youth (ages 18-29) had a more unfavorable view of China than those ages 50 and older:[5] 80% of youth viewed China unfavorably, compared to 68% of the oldest cohort. The 2021 SisaIN study confirmed that younger Koreans did indeed have the most negative feelings towards China, with those in their 20s holding views nearly two times more negative than those in their 50s and 60s. It is no surprise that, according to our survey, younger Koreans ages 18 through 39 were more likely to support a diplomatic boycott of the Olympics than older cohorts (45% compared to 40%). We interpret these findings as suggesting that younger Koreans who grew up with liberal, democratic values may be more critical of authoritarian, communist China than the older activists of “Generation 586,”[6] who instead grew up amid anti-American sentiments that fostered greater sympathy towards China.

 In this regard, anti-Chinese sentiment in Korea differs from the country’s past anti-American sentiment and enduring anti-Japanese sentiment. The former, especially prominent in the 1980s, represented backlash against U.S. policy and U.S. support of the Korean authoritarian dictatorship. It was not a critique of American people, culture, or institutions, which were still largely respected. Anti-Japanese sentiment is tied to the historical memory of colonial rule and strongly influenced by Korean nationalism. Despite public movements in recent years to boycott Japan and Japanese products, Koreans still import and enjoy Japanese culture, food, and fashion. In contrast, anti-Chinese sentiment is a critique of Chinese cultural imperialism and illiberalism: few Koreans view China’s institutions as exemplary or say that their country should learn from China.

Spillover to Politics and Policy

Negative views towards China have the potential to affect Korean politics. Our survey found that a large majority of respondents, 78%, indicated that among other issues both domestic and international (including housing prices, North Korea, and unemployment), ROK-China relations will be an important consideration when deciding which presidential candidate to vote for. For almost a quarter (22.4%) of respondents, this was a “very important” consideration. It is no surprise, then, that presidential candidates joined the public in expressing anger at the Olympics’ hanbok incident. Given that younger Koreans are expected to be the deciding factor in this election, it is particularly significant that 82% of respondents in their 20s said that ROK-China relations would be an important issue when voting. This atmosphere recalls that of 2002, when anti-American sentiments[7] swept the Korean presidential election between Roh Moo Hyun and Lee Hoi Chang, tipping the vote in favor of Roh. This time, however, the anti-Chinese sentiment may play out in favor of the conservatives, who tend to be tougher on China and emphasize the U.S.-ROK alliance.

This will pose a major foreign policy challenge for the new administration in Seoul, which will have to manage the bilateral relation with China in the midst of rising public sentiment against the country.

It is worth noting that in the midst of the ongoing U.S.-China rivalry, Koreans increasingly favor the United States over China. A 2019 survey by the Asan Institute for Policy Studies shows waning support for China and increasing support for the United States: in 2014, nearly 25% of Koreans supported strengthening ties with China over the United States, compared to almost 60% who favored the United States. By 2019, support for China had dropped to 18.9%, and for the United States had increased to 75%.[8] In the past, Korea has regarded China as an economic opportunity, while leaning closer to the United States for security reasons; a paradigm called “an-mi-gyung-jung” (“United States for security, China for the economy”). Now, most Koreans believe that this balancing act has run its course: we found that only 43% of Koreans agree with this paradigm to some degree, with younger Koreans showing the lowest proportion of agreement (38%).

Once regarded as a place of economic opportunities for Korea, China is increasingly losing favor as Koreans, led by young people, begin to rethink what China means to their nation – a trend akin to Koreans’ questioning of their relationship with the United States in the 1980s. This will pose a major foreign policy challenge for the new administration in Seoul, which will have to manage the bilateral relation with China in the midst of rising public sentiment against the country.

At the same time, the increase in positive attitude among Koreans towards the United States could offer an excellent opportunity for the U.S.-ROK alliance, which faced stress under the Trump and Moon administrations. The Biden administration should move quickly to fill the U.S. ambassador position in Seoul, meet with the next Korean president as soon as s/he is sworn in, and work closely with the future ROK administration to strengthen ties. Washington should not waste time, especially as a more strongly pro-alliance cohort of young Koreans grows into a political force that will shape their country’s future.


Gi-Wook Shin is the Director of the Shorenstein Asia-Pacific Research Center and the Korea Program. Haley M. Gordon is a Research Associate at the Korea Program at the Shorenstein Asia-Pacific Research Center. Hannah June Kim is an Assistant Professor in the Department of Political Science at the University of Nebraska, Omaha, and a former Shorenstein Postdoctoral Fellow in Contemporary Asia at APARC.


[1] In the past few days, Koreans have mounted more criticism of China in the Olympics, over disqualifications of two Korean short-track speed skaters that enabled Chinese athletes to medal.

[2] Between January 17 and 30, 2022, we conducted a survey of 1,017 respondents in South Korea using the survey service Lucid.

[3] These are compared to a 17-country median of 88% and 43%, respectively.

[4] Korean opinions of China plummeted following THAAD deployment, from an average of 60 out of 100 in 2016 to 37.3 in 2018 (East Asia Institute; Hankook Research).

[5] Other countries polled, in order from largest to smallest oldest-youngest difference, were the United States, Canada, the United Kingdom, Belgium, France, Australia, Germany, the Netherlands, Italy, Spain, Sweden, Denmark, and Japan.

[6] Koreans who are in their 50s, attended university in the 1980s, and were born in the 1960s.

[7] In particular, these increased following a June 2002 accident in which two Korean schoolgirls were struck and killed by U.S. troops driving back to their military base.

[8] Findings from Pew (2021) show that in Korea, contrary to most other countries, younger individuals are less likely than older cohorts to say that they prefer China to the United States for economic ties.

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A new study illuminates the potential effects of anti-Chinese sentiment in Korea.

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Once considered incapable of innovation, China’s contribution to technological advancement has become impossible to ignore as it continues its historic rise. Now home to such tech giants as Alibaba, Tencent, and Huawei, China is competing in the global market. But what does this technological success mean in the context of China's internal and international politics, particularly its tense relationship with the United States? Will efforts to decouple help or hinder progress in tech? Can China’s educational system produce the next generation of innovators and propel them to the forefront of technology? What effects, if any, is the recent tightening on tech giants having on the sector at large? In this program, experts Denis Simon, Senior Adviser to the President for China Affairs at Duke, and Dan Wang, technology analyst for Gavekal Dragonomics, will be discussing the status and consequences of decoupling for the US and China and their technological sectors.  

 


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Denis Fred Simon is Senior Adviser to the President for China Affairs at Duke and Professor of China Business and Technology at Duke's Fuqua School of Business.  He also serves as Executive Director of the Center for Innovation Policy at Duke.  Fluent in Mandarin Chinese, Simon has more than four decades of experience studying business, competition, innovation and technology strategy in China. In 2006, he was awarded the China National Friendship Award by Premier Wen Jiabao in Beijing.  Prior to returning to Duke, Dr. Simon served as Executive Vice Chancellor at Duke Kunshan University in China (2015-2020).  Simon’s career included spells as senior adviser on China and global affairs in the Office of the President at Arizona State University; vice-provost for international affairs at the University of Oregon; and professor of international affairs at Penn State University’s School of International Affairs. He also has had extensive leadership experience in management consulting having served as General Manager of Andersen Consulting in Beijing (now Accenture) and the Founding President of Monitor Group China.

Simon is the author of several books including Corporate Strategies Towards the Pacific Rim; Techno-Security in an Age of Globalization; and China’s Emerging Technological Edge: Assessing the Role of High-End Talent.

 

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Dan Wang is the Shanghai-based technology analyst for Gavekal Dragonomics, the China economics research firm. He tracks the prospects for China's industrial policy, US regulatory measures and the activities of multinationals in China. He has given keynotes for a variety of organizations and his work is widely cited in the press. Dan previously worked in Silicon Valley and studied philosophy at the University of Rochester. Dan's essays have been published in Foreign Affairs, The Atlantic, New York Magazine, and he is a contributor to Bloomberg Opinion

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This event is part of the 2022 Winter webinar series, New Frontiers: Technology, Politics, and Society in the Asia-Pacific, sponsored by the Shorenstein Asia-Pacific Research Center.

 


 

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This event is part of the 2022 Winter webinar series, The Future of China's Economy, sponsored by the APARC China Program.

 

Via Zoom Webinar. Register at: https://bit.ly/3IA7MdJ

Denis F. Simon Senior Adviser to the President for China Affairs, Duke University; Professor of China Business and Technology, Duke Fuqua School of Business
Dan Wang Technology Analyst, Gavekal Dragonomics
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Noa Ronkin
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As the COVID-19 pandemic remains a crucial global public health threat, pandemic control measures such as lockdowns and mobility restrictions continue to disrupt the provision of health services, leading to reduced healthcare use. Indeed, evidence shows the pandemic has emerged as a particular challenge for people with chronic conditions such as diabetes and hypertension. Yet there is limited data comparing the pandemic’s impact on access to care and the severity of chronic disease symptoms at the population level across Asia.

Now a new collaborative study, published by the Asia Pacific Journal of Public Health, addresses this limitation. The study co-authors, including APARC’s Asia Health Policy Program Director and FSI Senior Fellow Karen Eggleston, offer the first report comparing the impacts of the COVID-19 pandemic and its associated mobility restrictions on people with chronic conditions at different stages of socio-demographic and economic transitions in five Asian regions — India, China, Hong Kong, Korea, and Vietnam.

The findings show that the pandemic has disproportionately disrupted healthcare access and worsened diabetes symptoms among marginalized and rural populations in Asia. Moreover, the pandemic’s broad social and economic impact has adversely affected population health well beyond those directly suffering from COVID-19, with the resulting delayed and foregone care leading to uncertain longer-term effects.


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Unintended Adverse Consequences

Routine screening, risk factor control, and continuity of care for non-communicable diseases are a global challenge. The COVID-19 pandemic has exacerbated the challenge even further. Existing reports show the pandemic has particularly adverse impacts on essential prevention and treatment services for people with chronic conditions. These reductions in health services arose from pandemic-associated factors such as mobility restrictions, lack of public transport, and lack of health workforce.

Eggleston and a group of colleagues set out to provide evidence on how the pandemic has impacted chronic disease care in diverse settings across Asia during COVID-19-related lockdowns. Using standardized questionnaires, the researchers surveyed 5672 participants aged 55.9 to 69.3 years with chronic conditions in India, China, Hong Kong, Korea, and Vietnam. The researchers collected data on participants’ demographic and socio-economic status, comorbidities, access to healthcare, employment status, difficulty in accessing medicines due to financial and nonfinancial (COVID-19 related) reasons, treatment satisfaction, and severity of their chronic condition symptoms.

If no immediate actions are taken to mitigate pandemic impacts, the Asia-Pacific region will struggle to achieve the 2030 Sustainable Development Goal target 3.4 to reduce premature mortality from non-communicable diseases […] and to promote mental health and wellbeing.
Karen Eggleston et al.

The results show that the pandemic’s broad social and economic impact has adversely affected population health well beyond those directly suffering from COVID-19. Study participants with chronic conditions faced significant challenges in managing their symptoms during the pandemic. They experienced a loss of income and difficulties in accessing healthcare or medications, with the resulting delayed and foregone care leading to uncertain longer-term effects. For a nontrivial portion of participants, these factors are associated with the worsening of diabetes symptoms. The threat is twofold among people living in rural populations with limited access, availability, and affordability of healthcare services.

A Global Health Priority

The unintended adverse consequences of the COVID-19 pandemic on chronic disease care may also further aggravate inequality in health outcomes. “If the trend continues and no immediate actions are taken to mitigate pandemic impacts,” Eggleston and her colleagues caution, then “the Asia-Pacific region will struggle to achieve the 2030 Sustainable Development Goal (SDG) target 3.4 to reduce premature mortality from non-communicable diseases by a third relative to 2015 levels and to promote mental health and wellbeing.”

Addressing the pandemic’s unintended negative social and economic impacts on chronic disease care is a global health priority, determine the researchers. They propose several measures to help provide timely care for people with chronic conditions in resource-constrained settings. These include implementing innovations in healthcare delivery models to improve the adoption of healthy lifestyle changes and self-management of chronic disease and mild COVID-19 symptoms, increasing investment in interventions to provide social and economic support to disadvantaged populations, and strengthening primary healthcare infrastructure and support of healthcare providers.

The study was supported in part by funding from Shorenstein APARC’s faculty research award, Stanford King Center for Global Development, and a seed grant from the Stanford Center for Asian Health Research and Education.

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Bargaining Behind Closed Doors: Why China’s Local Government Debt Is Not a Local Problem

New research in 'The China Journal' by APARC’s Jean Oi and colleagues suggests that the roots of China’s massive local government debt problem lie in secretive financing institutions offered as quid pro quo to localities to sustain their incentive for local state-led growth after 1994
Bargaining Behind Closed Doors: Why China’s Local Government Debt Is Not a Local Problem
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In the first report of its kind comparing the impacts of the pandemic on people with chronic conditions in five Asian regions, researchers including APARC’s Karen Eggleston document how the pandemic’s broad social and economic consequences negatively affected population health well beyond those directly suffering from COVID-19.

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China’s rapidly growing local government debt problem has long been recognized by foreign observers as a risk, but inside China, only recentlywas this problem called out as alarming.Why has local government debt been allowed to grow with little direct intervention from central authorities? We argue that it has much to do with a “grand bargain” between the central government and localities during the 1994 fiscal recentralization reform. While much scholarly attention has been paid to the consequences of the 1994 reform that left localities with a tremendous fiscal gap, our findings show that Beijing in fact gave localities the green light to create new backdoor financing institutions that counteracted the impact of fiscal recentralization. In essence, these institutions were the quid pro quo offered to localities to sustain their incentive for local state-led growth after 1994.

The bargain worked, and growth continued. The drawback, however, was that China’s economic growth has been accompanied by the accumulation of local government debt with little transparency and central control. When the global financial crisis slowed growth, and local deficits and debts spiked, Beijing began to shut down backdoor financing and opened front-door options that were transparent and under the control of national authorities—but with limited success. In the wake of COVID-19, the question is whether the pendulum will swing back toward more tolerance of local debt for the sake of economic growth.

 

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Over much of the last four decades, China's economy has ballooned, growing to become the world's second-largest economic power behind the United States, when measured by GDP. Yet alongside the rapid growth came mounting local government debt. While foreign observers have long recognized China’s local government debt as a risk, only recently did the Chinese Communist Party call out the problem as alarming. 

Why have central authorities allowed local government debt to grow with such little direct intervention? The answer to this question has much to do with a “grand bargain” between China's central government and localities during the 1994 fiscal recentralization reform, according to a new study, "China’s Local Government Debt: The Grand Bargain," published in the January issue of The China Journal.  The study’s co-authors are Stanford political scientist Jean Oi, a senior fellow at FSI and director of the China Program at APARC, Adam Liu, a former doctoral student of Oi, and Yi Zhang.


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The Origins of China's Massive Local Government Debt

The 1994 reform left localities with a tremendous fiscal gap. But then Beijing in fact gave localities enough autonomy to seek funding independently and the green light to create new backdoor financing institutions that counteracted the impact of fiscal decentralization, show Oi and her colleagues. They call this dynamic a “grand bargain.” The bargain’s purpose was to garner regional cooperation in fiscal and financial recentralization campaigns. The result, as the co-authors document, was far from the intended outcome. The policy resulted in greater decentralization, as local leaders used backdoor financing to meet expenditure responsibilities and bolster local development.

The study offers a fresh interpretation of the political economy surrounding the 1994 fiscal reform and a new understanding of the grand bargain, in which secretive financing was the quid pro quo offered to localities to sustain their incentive for local state-led growth after 1994. Oi and her colleagues draw upon municipal and county data as well as interviews and memoirs of key party leaders, architects of the 1994 fiscal reform, to support their assertions about the dynamics of China's economic rise and the local debt problem. Their findings highlight the "paradoxical political dynamics" of China’s political economy. As the 1994 fiscal reform recentralized tax revenues, "countervailing policies substantially promoted decentralization and fiscal empowerment of localities and decreased the transparency of local financial arrangements."

Granting localities the right to operate local state banks was a necessary but insufficient step for establishing the backdoor financing needed to sustain the grand bargain. Local governments needed a middleman to circumvent the bans on borrowing.
Liu, Oi, and Zhang

The grand bargain led to China's continued growth. The drawback, however, was that this economic growth has been accompanied by the accumulation of local government debt with little transparency and central control. When the global financial crisis impacted growth rates, local deficits and debts spiked. In response, Beijing began to shut down backdoor financing and opened front-door options that were transparent and under the control of national authorities — but with limited success.

Reining in Local Government Financing Vehicles

The researchers posit that "only beginning in 2017 did the Communist Party’s own Central Leading Group on Finance and Economic Affairs and various government-related media begin to label local government debt as a threat to the economy, raising the alarm bells by calling it a 'gray rhino,' a likely high-impact threat that was being ignored." Why, then, didn’t Beijing quickly put a stop to local government debt? Why did central authorities wait until 2015 to put measures in place, and wait even longer to identify local government debt as an economic threat?

Oi and her colleagues explain that studies of policy implementation and regulation in China tell us that the national government faces information asymmetry problems, where localities can subvert upper-level directives because the center has imperfect knowledge of what local agents are doing. Such subversion is most likely when local interests are not aligned with Beijing’s. Now, in the wake of the COVID-19 pandemic, the question is whether the pendulum will swing back toward more tolerance of local debt for the sake of economic growth.

All indications, the authors agree, suggest that during COVID-19 and its aftermath, especially as China also has vowed to win and maintain the fruits of the battle against poverty “at all costs,” localities are going to need extra resources, borrowed or not. The center’s pendulum, at least for now, is swinging further away from fiscal discipline toward local incentives and growth.

[Xi's] anticorruption tactics and exerting tighter control to reduce local government debt have not solved the debt problem because the root causes are institutional.
Liu, Oi, and Zhang

Evading Institutional Reforms

Oi and her colleagues contend that the expansion of local government debt is a feature of China's developmental model, which aims to "circumvent rather than tackle difficult institutional reform, kicking the can down the road, opting for an easier fix to avoid the potentially high political costs.” 

The authors' primary takeaway is therefore that local government debt in China is not a local problem. Similar to other developing nations that depend upon local partners, China faces a dual-commitment problem: "growing the local economy without debt requires the central state to simultaneously commit to respecting its local agents’ access to and control over the fruits of local development (of which local fiscal resources are the most crucial part), while exercising credible fiscal discipline over precisely the same set of local agents that the center seeks to incentivize.”

For nearly three decades, Chinese central authorities have relied on the grand bargain to boost the nation's economic might. Oi and her colleagues reveal that the problem of local government debt reverberates to the highest echelons of the Chinese state decision makers and continues to present strategic challenges for the economic juggernaut.  

Read the article by Oi et al

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New research in 'The China Journal' by APARC’s Jean Oi and colleagues suggests that the roots of China’s massive local government debt problem lie in secretive financing institutions offered as quid pro quo to localities to sustain their incentive for local state-led growth after 1994

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Policies implemented by the CCP in Xinjiang since c. 2016 have become a central issue in PRC international relations, leading to international determinations that those policies constitute genocide; scrutiny of global supply chains for Xinjiang cotton, textiles and polysilicon; US sanctions on companies and individuals and Congressional inquiries directed at Airbnb and other multinationals operating in Xinjiang; and diplomatic boycotts of the Olympics. The assimilationist policies, if most extreme in Xinjiang, are related to the broader Zhonghua-izing campaign against religion and non-Mandarin language and perhaps even to intensified control over Hong Kong and efforts to intimidate Taiwan—an aggressive intolerance of cultural and political diversity that is emerging as a central feature of Xi Jinping’s tenure. This talk will review the Xinjiang crisis to date and suggest how we should understand these events and trends.



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Portrait of James Millward
James Millward is Professor of Inter-societal History at the Walsh School of Foreign Service, Georgetown University, teaching Chinese, Central Asian and world history. He joins the Walter H. Shorenstein Asia-Pacific Research Center (APARC) as visiting scholar with the China Program for the 2022 winter quarter. He is also an affiliated professor in the Máster Oficial en Estudios de Asia Oriental at the University of Granada, Spain. His specialties include Qing empire; the silk road; Eurasian lutes and music in history; and historical and contemporary Xinjiang. He follows and comments on current issues regarding the Uyghurs and PRC ethnicity policy. Millward has served on the boards of the Association for Asian Studies (China and Inner Asia Council) and the Central Eurasian Studies Society, and was president of the Central Eurasian Studies Society in 2010. He edits the ''Silk Roads'' series for University of Chicago Press. His publications include The Silk Road: A Very Short Introduction (2013), Eurasian Crossroads: A History of Xinjiang (2007), New Qing Imperial History: The Making of Inner Asian Empire at Qing Chengde (2004), and Beyond the Pass: Economy, Ethnicity and Empire in Qing Central Asia (1998). His articles and op-eds on contemporary China appear in The New York Times, The Los Angeles Review of Books, The New York Review of Books and other media.  

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James Millward Visiting Scholar, APARC, Stanford University; Professor of Inter-societal History, Walsh School of Foreign Service, Georgetown University
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China’s rapidly growing local government debt problem has long been recognized by foreign observers as a risk, but inside China, only recently was this problem called out as alarming.  Why has local government debt been allowed to grow with little direct intervention from central authorities?  Based on a forthcoming paper, Oi will show how a “grand bargain” the central authorities entered into with the localities allowed Beijing to take the lion’s share of tax revenues after 1994, but also allowed localities to gain new resources and power as a quid pro quo.  While the bargain provided an expedient and seemingly successful strategy that worked for more than a decade to fuel rapid local state-led growth, it had significant costs that are now becoming increasingly visible.  Because land finance was the core means by which localities raised revenue, Oi also will help explain why the problems with property developers like Evergrande are so important to China’s future economy.   



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Dr. Jean C. Oi
Jean C. Oi is the William Haas Professor of Chinese Politics in the Department of Political Science and a senior fellow in the Freeman Spogli Institute for International Studies at Stanford University. She directs the China Program at the Walter H. Shorenstein Asia-Pacific Research Center and is the Lee Shau Kee Director of the Stanford Center at Peking University. Professor Oi has published extensively on China’s reforms. Recent books include Fateful Decisions: Choices That Will Shape China’s Future, co-edited with Thomas Fingar (Stanford University Press, 2020); Zouping Revisited: Adaptive Governance in a Chinese County, co-edited with Steven Goldstein (Stanford University Press, 2018); and Challenges in the Process of China’s Urbanization, co-edited with Karen Eggleston and Yiming Wang (2017). Current research is on fiscal reform and local government debt, continuing SOE reforms, and the Belt and Road Initiative.

 


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Chinese 100 yuan bills

This event is part of the 2022 Winter webinar series, The Future of China's Economy, sponsored by the APARC China Program.

 

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Jean C. Oi Director of Shorenstein APARC China Program; William Haas Professor of Chinese Politics, Stanford University
Seminars
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What is the relationship between internal development and integration into the global economy in developing countries? How and why do state–market relations differ? And do these differences matter in the post-Cold War era of global conflict and cooperation? Drawing on research in China, India, and Russia and examining sectors from textiles to telecommunications, Micro-Institutional Foundations of Capitalism introduces a new theory of sectoral pathways to globalization and development. Adopting a historical and comparative approach, Hsueh's Strategic Value Framework shows how state elites perceive the strategic value of sectors in response to internal and external pressures. Sectoral structures and organization of institutions further determine the role of the state in market coordination and property rights arrangements. The resultant dominant patterns of market governance vary by country and sector within country. These national configurations of sectoral models are the micro-institutional foundations of capitalism, which mediate globalization and development.



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Portrait of Roselyn Hsueh
Roselyn Hsueh is an associate professor of political science at Temple University, where she co-directs the Certificate in Political Economy. She is the author of Micro-Institutional Foundations of Capitalism: Sectoral Pathways to Globalization in China, India, and Russia (Cambridge University Press, forthcoming, 2022), China’s Regulatory State: A New Strategy for Globalization (Cornell University Press, 2011), and scholarly articles on states and markets, comparative regulation and governance, and political economy of development. She is a frequent commentator on politics, finance and trade, and economic development in China and beyond. BBC World News, The Economist, Foreign Affairs, National Public Radio, and The Washington Post, among other media outlets, have featured her research. Prestigious fellowships, such as the Fulbright Global Scholar Award, have funded international fieldwork and she has served as a Visiting Scholar at the Institute of World Economics and Politics, Chinese Academy of Social Sciences. She holds a B.A. and Ph.D. in Political Science from the University of California, Berkeley.

 

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Roselyn Hsueh Associate Professor of Political Science, Temple University
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In China, market institutions are still being developed and private owned enterprises need help to overcome obstacles arising from the imperfection of market institutions. Such help can come from various levels of the government or state-owned enterprises. It is believed that such help is more likely if a major shareholder of the private enterprise has formed a joint venture with a state shareholder, either directly or indirectly. In this talk, Bai Chong-en will discuss ownership connections among state and private investors (ultimate shareholders) and their changes overtime. He will also examine the relationship between the degree of such connection and some important characteristics of the investors. His model suggests that such connections have played an important role in the growth of the private sector. 



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Portrait of Bai Chong-en
BAI Chong-En is the Mansfield Freeman Chair Professor and dean of the School of Economics and Management of Tsinghua University. He is also the director of both the National Institute for Fiscal Studies of Tsinghua University and the Institute for State-Owned Enterprises of Tsinghua University. He earned his PhD degree in economics from Harvard University. His research areas include institutional economics, economic growth and development, public economics, finance, corporate governance, and Chinese economy.

BAI is a member of the National Committee of the Chinese People’s Political Consultative Conference, the “14th Five-Year Plan” National Development Planning Expert Committee, the Chinese Economists 50 Forum, the China Finance 40 Forum, and Chinainfo 100. He was a member of the monetary policy committee of the People’s Bank of China from 2015 to 2018. He served as Adjunct Vice-President of Beijing State-Owned Assets Management Co., Ltd. from August 2011 to December 2012. He was a non-resident senior fellow of the Brookings Institution from 2006 to 2007.

 


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Chinese 100 yuan bills

This event is part of the 2022 Winter webinar series, The Future of China's Economy, sponsored by the APARC China Program.

 

Via Zoom Webinar. Register at: https://bit.ly/31peuDs

Bai Chong-en Professor and Dean of School of Economics and Management; Mansfield Freeman Chair Professor, Tsinghua University
Seminars
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